JPMorgan Chase raises probability of U.S. recession by year-end to 35%

JPMorgan now believes that there is a 35% chance of a recession in the US economy by the end of this year, up from 25% at the beginning of last month. JPMorgan economist Bruce Kasman wrote in a report to clients on Wednesday that US news "suggests that labor demand is weakening more sharply than expected, and preliminary signs of layoffs are emerging." The team maintains a 45% chance of a recession by the second half of 2025. "We have moderately raised our assessment of the risk of an economic recession, while our assessment of interest rate prospects has been adjusted more significantly," Kasman and his colleagues wrote. JPMorgan now believes that the likelihood of the Federal Reserve and other central banks maintaining high interest rates in the long term is only 30%, compared to a possibility of 50% just two months ago. With US inflation pressures easing, JPMorgan expects the Fed to cut interest rates by 50 basis points in September and November respectively.